Economist Andrew Sweet is the new executive director for the Covid Royal Commission of Inquiry, and two other seasoned economists have also taken up roles around him.
In recent weeks, economists Philip Stevens and Dave Heatley have taken positions at the inquiry, as head of research and chief researcher respectively.
The trio, along with inquiry commissioner and economist Judy Kavanagh, previously worked together at the now defunct Productivity Commission.
Sweet, Stevens and Heatley all work at the inquiry secretariat, housed within the Department of Internal Affairs (DIA). Its organisational and administrative functions and research underpin the commission’s work.
The hiring choices suggest that the second phase of the Covid Inquiry is set to dig more deeply into the costs of New Zealand’s pandemic response – both social and economic.
This emphasis is anticipated in the terms of reference for the new phase of work. This phase will look at pandemic decision-making related to the approval and use of vaccines and their safety, private sector involvement (or non-involvement) in elements of the pandemic response, and the lockdowns of 2021.
It must assess the related decision-making and the health aims, in light of both the social and economic cost, and of unintended consequences.
The commission is chaired by lawyer Grant Illingworth KC; the third commissioner is Anthony Hill, a lawyer and former health and disability commissioner.
In 2020, Heatley, then a principle analyst at the Productivity Commission, produced what appears to have been the only cost-benefit analysis of any pandemic measure produced in or for the New Zealand public sector. Kavanagh contributed additional modelling and research for it, and Sweet was among its peer reviewers.
The work, born of discussions with the Treasury, found the cost of the five day April extension of the 2020 Level 4 lockdown was $740 million greater than the benefits; it was designed to show a technique for weighing health benefits against economic costs that could be used in future decision-making.
However, then-Finance Minister Grant Robertson did not welcome the endeavour, and the exercise was criticised by the team of mathematical modellers led by Shaun Hendy, a physicist and then a professor at the University of Auckland, on whose work much of the Government’s pandemic policy-making relied.
Heatley’s analysis was published later in 2020 in the journal, New Zealand Economic Papers, and it remains on the Treasury website. But neither he nor the Productivity Commission was asked to provide any further such work.
Hendy also authored a further critique of the published Heatley work; he argued for a different method to capture the dynamics of infectious disease. This work was published in New Zealand Economic Papers last year and its findings were that the 5 extra days of Level 4 lockdown constituted a benefit that outweighed cost by close to $1b.*
A spokeswoman for DIA said the Royal Commission currently employs 24 FTEs within its secretariat, three are economists (Sweet, Heatley and Stevens). The secretariat for the first phase employed some 31 FTEs, one was an economist.
The spokeswoman noted that a range of professionals are currently employed, including lawyers, public policy specialists, and five communications and engagement specialists; other specialists are contracted as required.
The recent hiring at the commission, also follows a period of significant and unexplained departures. Earlier this year, Helen Potiki left the position of executive director to the Phase 2 inquiry after just six months. In addition, counsel assisting the inquiry, Kristy McDonald KC and Nick Whittington (appointed by the Solicitor-General), also resigned.
Potiki did not respond to a request for comment and McDonald and Whittington declined to comment. The DIA spokeswoman said the department couldn’t comment on Potaki’s resignation for privacy reasons. She confirmed one further resignation from the secretariat in 2025.
The second phase of inquiry marks a political compromise. The original inquiry was established by the Labour Government in late 2022 and was headed by University of Melbourne professor and epidemiologist Tony Blakely, who is a friend of the former Government’s key health and pandemic adviser Ashley Bloomfield, and at times during the pandemic provided advice to Bloomfield and other Government advisers.
Blakely disclosed the connections as a conflict of interest, though he described his advisory role as “informal” when questioned by the Herald, despite Government Ministers’ reliance on his view on how and when to end the managed isolation and quarantine system, including in a judicial review heard by the High Court in 2022.
Critics included both the Act Party and NZ First, partners in the current Coalition Government. NZ First had hoped to scrap the original Covid Inquiry and start again; however, the Government ultimately decided to keep the original inquiry (then designated Phase 1) and to add a second phase with fresh terms of reference and new commissioners.
In November, Phase 1 delivered its report. In broad terms it endorsed the general sweep of the Government’s pandemic response, though it included extensive consideration of some mistakes and failures. It also distilled dozens of recommendations, many focused on the establishment of high-level strategic planning frameworks and government systems to apply in the case of future pandemics.
The report, however, gave little attention to the economic costs of New Zealand’s Covid response or to whether the benefits gained were sufficient to justify them.
It also appears to have ignored critics of the Government response like New Zealand academic economist John Gibson, professor at Waikato University.
The report repeatedly held up New Zealand’s extraordinarily low “excess deaths” during the pandemic (2020-2022) as evidence of pandemic policy success.
However, in the report as is commonly the case elsewhere, excess deaths measured the actual number of deaths against the number of deaths expected. Critically, the number of deaths expected was estimated based on the trend in previous years (2015-2019), when deaths were rising at 2% per annum, roughly in line with population growth.
Gibson contends that New Zealand’s expected deaths during the pandemic should have been adjusted for the stalled population growth produced by border closure; once the adjustment is made, he argues, New Zealand’s excess deaths are no longer internationally extraordinary, and are poorer than or comparable to a group of 10 other countries, including Canada, Germany, Denmark, Belgium, the Netherlands, Israel and Australia. His related paper was published in the journal New Zealand Economic Papers in 2023.
Gibson’s work also attracted criticism, notably from David Hood, an advisor in IT Training and Development at the University of Otago, and the University of Canterbury’s Mike Plank.
Hood argued for measuring mortality using age-adjusted death rates (to account for New Zealand’s aging population), and that this adjustment did indeed show extraordinarily low excess deaths during New Zealand’s Covid years. Gibson responded. Both views were also published in New Zealand Economic Papers.
Gibson previously told the Herald that he supplied the paper to the first phase of the Covid Inquiry, but did not meet with commissioners.
The inquiry will hold public hearings in Auckland next month, and in Wellington in August, timing that is later than the originally anticipated June/July schedule.
The Wellington hearings “are intended for the inquiry and the public to hear from key decision-makers and advisors to the pandemic response,” a DIA spokeswoman told the Herald, but she declined to say whether the commission expects to use its powers of compulsion.
The inquiry’s terms of reference state that the inquiry must operate in a way that “does not take a legalistic and adversarial approach”.
However, lawyer and professor Philip Joseph KC, an expert in public law at the University of Canterbury, confirmed to the Herald that this does not affect the inquiry’s power to summon witnesses, conferred through the Inquiries Act 2013.
Important aspects of the hearings have yet to be finalised. The spokeswoman declined to confirm: whether former Prime Minister Dame Jacinda Ardern has been asked to appear; the inquiry’s travel budget for the hearings (summoned witnesses are entitled to be paid reasonable costs and travel expenses); and whether those asked to appear at the hearings will be permitted to attend remotely.
The spokeswoman said: “the inquiry is yet to formally invite any former decision-makers to appear at the hearings…[and] some aspects of the overall approach and shape of the inquiry’s public hearings are still being finalised, but the inquiry will communicate proactively closer to the time about who will attend, and in what capacity.”
The Phase 2 report is due on February 26 next year.
This story has been updated following correspondence from Shaun Hendy. It now includes the substance of the criticism Hendy levelled at Dave Heatley’s cost-benefit work, and it notes Hood’s critique of John Gibson’s work on excess deaths.
Kate MacNamara is a South Island-based journalist with a focus on policy, public spending and investigations. She spent a decade at the Canadian Broadcasting Corporation before moving to New Zealand. She joined the Herald in 2020.